I am positive that many Canadians, as with most folks around the world, think charities are nothing more than a cash grab. There is as much propaganda for charities as there junk mail. It comes in the form of letters, emails, newspaper advertisements, pleas at the workplace, lotteries, phone calls at dinner time and knocks on the door.
Like many people, I too have been skeptical of the multitudes of requests of help by giving to charities. What most folks don’t know is how seriously the Canada Revenue Agency (CRA) takes the status of charity granted to any such organizations.
“Registered charities receive generous tax incentives under the Income Tax Act including the ability to issue official donation receipts. To maintain this privilege, registered charities must keep adequate books and records, to allow the CRA to verify charitable donations, and to ensure the proper use of charitable resources. Failing to maintain adequate books and records, and improperly issuing donation receipts are serious breaches of the Income Tax Act, and each is grounds for the revocation of charitable registration.”
http://www.cra-arc.gc.ca/nwsrm/rlss/2012/m09/nr120914-eng.html
If you don’t follow the rules, the charity status will be revoked. Once revoked, you can’t issue tax receipts to those who donated funds to your organization. The Canadian Quadriplegic Association, the Toronto, ON based group was stripped of its charity status on September 15, 2012 for failure to properly record charitable contributions and expenditures. Who suffers now…the folks the organization helps, the researchers hoping to break the code and cure spinal cord injuries, and all the people who believed enough to contribute hard earned money from their own pockets.
Let this be a lesson to all who must maintain records, whether it is for business mileage or for charitable donations – please keep accurate records.
For more information on responsibilities of a charity:
Helping you to better understand what’s in your pocket.
Until next time.
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